1228. Constitutionality-The present inheritance tax law of 1905 and the amendment of 1911, have been held constitutional against various objections.47

1229. Nature of tax-The inheritance tax in this state is not a tax on the property, but a tax on the transfer or right of succession.48

1230. Construction-The statute is to be given a fair and reasonable construction-not a strict construction.49 All the provisions of the statute must be construed together as interdependent parts of one law.50 The practical construction placed on the statute by the public officers charged with its administration is entitled to great weight.51 In the interest of uniformity the construction placed on similar statutes in other states should be followed when reasonably possible.52 The present inheritance tax law of 1905 has been held inapplicable to a transfer of property made prior to its enactment.53

1231. Exemptions and deductions-The inheritance tax is to be computed on the clear value of the property, or the interest therein, which actually passes to the beneficiaries. In other words, all the expenses and charges of administration are to be deducted before computing the tax. The amount expended by a representative for a monument over the grave of the decedent, approved by the probate court, is not subject to an inheritance tax.5 The amount paid out of an estate as a federal inheritance tax is to be deducted as an expense of administration before computing the amount of a state inheritance tax.56 The amount allowed to a widow for the support of herself and family under G. S. 1913, § 7243, pending administration, and the personal property to which

55

47 State v. Bazille, 97 Minn. 11, 106 N. W. 93; State v. Probate Court, 112 Minn. 279, 128 N. W. 18; State v. Probate Court, 128 Minn. 371, 150 N. W. 1094. For cases holding prior acts unconstitutional see, Drew v. Tifft, 79 Minn. 175, 81 N. W. 839; State v. Bazille, 87 Minn. 500, 92 N. W. 415; State v. Harvey, 90 Minn. 180, 95 N. W. 764.

48 State v. Bazille, 97 Minn. 11, 106 N. W. 93; State v. Probate Court, 124 Minn. 508, 145 N. W. 390; State v. Probate Court, 128 Minn. 371, 150 N. W. 1094; State v. Probate Court, 137 Minn. 238, 163 N. W. 285; State v. Probate Court, 143 Minn. 77, 172 N. W. 902.

49 State v. Bazille, 97 Minn. 11, 106 N. W. 93. See, contra, State v. Probate Court, 137 Minn. 238, 163 N. W. 285 (statute to be construed strictly against the government).

50 State v. Probate Court, 100 Minn. 192, 110 N. W. 865.

51 In re Boutin's Estate, 149 Minn. 148, 182 N. W. 990. See In re Thorne's Estate, 145 Minn. 42, 177 N. W. 638.

52 State v. Probate Court, 136 Minn. 392, 162 N. W. 459.

53 State v. Probate Court, 102 Minn. 268, 113 N. W. 888.

54 State v. Probate Court, 101 Minn. 485, 112 N. W. 878; State v. Probate Court, 138 Minn. 107, 164 N. W. 365; State v. Probate Court, 139 Minn. 210, 166 N. W. 125; State v. Probate Court, 143 Minn. 77, 172 N. W. 902.

55 State v. Probate Court, 138 Minn. 107, 164 N. W. 365.

56 State v. Probate Court, 139 Minn. 210, 166 N. W. 125. See 7 A. L. R. 714.

she is entitled under the same section, are not subject to an inheritance tax. 57 The life estate of the widow in the homestead is not subject to the inheritance tax, and the value thereof is a proper deduction in the tax proceedings, even though she takes a fee title thereto by the last will and testament of her husband.58 In determining the value of an estate for the purpose of levying an inheritance tax, incumbrances on the real estate must be deducted from the value of the real estate, and not from the value of the personal property. The value of the real estate for the purpose of such taxation is measured by the value of the decedent's interest therein determined by deducting the incumbrances from the value of the land.59 Where the property of an estate is committed to a trustee for a definite period, to be by him managed and controlled for the benefit of those to whom it passes by will, the compensation of the trustee fixed by the will is not a proper item to deduct from the valuation of the estate.60

1232. Conflict of laws-Non-residents-Situs of property-The language of the statute indicates an intention on the part of the legislature to impose a succession tax in all cases where it has the power to impose such a tax. The statute is not limited to cases where the devolution of property is governed by the laws of this state."1 As between debtor and creditor the situs of a debt is the domicil of the creditor. But the creditor may give it a situs elsewhere, and it may be taxed under the laws of the state where the evidences of indebtedness are deposited. Our statute imposes the tax on the transfer of the property and not upon the property itself. A transfer made in this state by a resident testator is taxable here, though the property transferred had an actual situs in another state at the time of the death of the testator and the transfer is also taxable in the latter state.": Whether the fact that an obligation of a debtor resident in Minnesota is secured by a mortgage of real property situated therein gives a situs to the obligation rendering it subject to a succession tax in Minnesota is an open question. But where the obligation is secured by a mortgage of real property of a corporate debtor, organized under the laws of this state as a railroad corporation, a portion of which property is in this state and a larger portion in other states through which the railroad passes and where it is subject to the jurisdiction of the courts and where the debt can be. enforced and the mortgage foreclosed and the whole mortgaged property sold, the fact that the mortgage covers property in this state does

57 State v. Probate Court, 137 Minn. 238, 163 N. W. 285.

58 In re Murphy's Estate, 146 Minn. 418, 178 N. W. 1003, 179 N. W. 728.

59 State v. Probate Court, 145 Minn. 155, 176 N. W. 493.

62

60 State v. Probate Court, 101 Minn. 485, 112 N. W. 878.

61 State v. Probate Court, 128 Minn. 371, 150 N. W. 1094.

62 State v. Probate Court, 124 Minn. 508, 145 N. W. 390.

63

not give it a taxable situs here supporting a succession tax. Capital stock represents the interest of its owner in the corporation and the rights of such owner rest on the laws of the state which created the corporation. A transfer by will of stock of a domestic corporation is subject to the inheritance tax of this state though the testator was a resident of another state and kept the certificates of stock in such state and the courts of that state could acquire jurisdiction by service of process therein. The situation of a stockholder differs from that of a bondholder. By exerting jurisdiction over the transfer from a non-resident decedent of the stock of a domestic corporation, the taxation statute severs the situs of such stock from the domicil of the decedent for the purposes of the statute. Where a domestic corporation is incorporated only in this state, the tax on a transfer by will of its stock is to be computed on the full value of such stock, less the exemptions allowed by statute, though the properties of the corporation may be situated in several states. Where the corporation is incorporated in several states there may be an apportionment. The devolution of debts owed by residents of this state, whether evidenced by promissory notes or not, and of the stock of corporations of this state, and of the stock of national banks located in this state, is subject to a succession tax in this state, though the debts were owing to, and the stock was held by, non-resident decedents. The personal property of a non-resident decedent, which has a situs in this state or is subject to the laws thereof, is subject to the succession tax of this state, though the devolution of such property is governed by the law of the domicil of the decedent." That it is necessary for a non-resident creditor of a resident debtor to come into the state and invoke its laws and resort to its courts to enforce his obligations is a fact of importance in determining the right of the state to impose a succession tax on the devolution of the obligation. Where the security holder is a non-resident and the security is not physically within the state it is the one essential fact to confer jurisdiction to impose such a tax. The rule of practical construction is held not to control the court in this case, the statute being that when a decedent is a nonresident, the property within the jurisdiction of the state transferred by his will or by intestate law is subject to a tax, and the difficulty of its application being dependent chiefly on the facts of a given case.68 Shares of beneficial certificates in a trust entitling the holder to dividends from the shares of mining corporations, domestic and foreign

65

67

63 State v. Chadwick, 133 Minn. 117, 157 N. ". 1076, 158 N. W. 637.

64 State v. Probate Court, 142 Minn. 415, 172 N. W. 318.

65 State v. Probate Court, 128 Minn. 371, 150 N. W. 1094; State v. Probate Court, 142 Minn. 415, 172 N. W. 318.

66 State v. Probate Court, 128 Minn. 371, 150 N. W. 1094.

67 State v. Chadwick, 133 Minn. 117, 157 N. W. 1076, 158 N. W. 637. See State v. Probate Court, 142 Minn. 415, 172 N. W. 318.

68 In re Thorne's Estate, 145 Minn. 412, 177 N. W. 638.

constituting the corpus of the trust and to ultimately share in the trust property, and which certificates have a market value, are subject to a succession tax when their non-resident owner dies, if the trust has a domicil or situs within the jurisdiction of this state. The trust here in question has such situs within this state from the fact that its principal place of administration is within this state where the corpus of the trust is kept and managed and where its president, secretary, and office force is located, notwithstanding, for convenience, some of its business is transacted in another state, where two of the four trustees reside."9 Bonds of the Great Northern Railway Company, a company incorporated under the laws of this state, having its principal place of business and general offices here, payable in New York, owned by a resident of Illinois and in his possession there at the time of his death, the persons succeeding thereto being residents of Illinois, the company being subject to jurisdiction in states other than Minnesota and it not being necessary to invoke the laws of Minnesota or to resort to its courts to enforce the obligation of the bonds, have been held not subject to a succession tax in Minnesota. A resident of this state, acting under a power of appointment in a will of his mother, transferred by will personal property actually situated in another state to beneficiaries resident in the latter state. Held, that the transfer was made here and taxable here; that it was the exercise of the power of appointment that constituted the transfer of the property and not its creation; that under our inheritance tax law the appointment when made was a taxable transfer, in the same manner as though the property to which the appointment related belonged absolutely to the donee of the power and had been bequeathed or devised by the will. The reciprocal exemption amendment of 1911, since repealed, applies only where the laws of another state impose an inheritance tax upon "transfers of personal property of decedents," but "exempt or do not impose a tax upon transfers of personal property of residents of Minnesota having its situs in such state." Laws of another state which impose such tax only where the property passes to collateral relatives or strangers, but do impose such tax where personal property within such state, belonging to residents of Minnesota, passes by will to such collateral relatives or strangers, do not bring the property of residents of that state within such exemption.72

70

71

1233. What transfers taxable-Devises, bequests and inheritancesTransfers by non-residents-Gifts in contemplation of death-Powers of appointment-Statute-A tax shall be and is hereby imposed upon any

69 In re Thorne's Estate, 145 Minn. 412, 177 N. W. 638.

70 State v. Chadwick, 133 Minn. 117, 157 N. W. 1076, 158 N. W. 637. See State v. Probate Court, 142 Minn. 415, 172 N. W. 318; 8 A. L. R. 863.

71 State v. Probate Court, 124 Minn. 508, 145 N. W. 390.

72 State v. Probate Court, 128 Minn. 371, 150 N. W. 1094.